I see that you posted this question about 2 weeks back or so. If you didn't find the answer for this, it is suprisingly easy.
Your login.php file should read like this:
Code:
<?
require "../smarty.php";
require "../config.php";
@include "./https.php";
require "./auth.php";
$smarty->assign("main","mainlogin");
require "../include/categories.php";
$smarty->display("customer/home.tpl");
?>
It was the ../include/categories.php that was missing. Also, now that we're at this point, don't forget to remove the if/else code in skin1/customer/home.tpl that calls "auth.tpl".
It might also be noted that by doing all of this, I had to change the paths in the original auth.tpl form to reflect a slightly different directory location, and then pasted into my new login.tpl page. at first the form action used "../../../include/login.php" and I had to change it to "../include/login.php"